Fundamental Research Corp (FRC) has initiated coverage on Chilean Metals Inc. (TSXV:CMX, OTCQB:CMETF, SSE:CMX, MILA:CMX, FRA:IVV1, BER:IVV1), with a BUY rating and a fair value estimate of C$0.30 per share.
As quoted in the report, FRC’s highlights for Chilean Metals include:
- Chilean Metals Inc. (“Chilean”, “company”) holds a diversified portfolio of iron oxide copper gold (“IOCG”) potential projects in Chile and Nova Scotia, Canada. The company also holds a 3% NSR (net smelter return) on Teck Resources’ (TSX: TECK) Copaquire molybdenum-copper project in Chile.
- The company’s primary focus in Chile is the Zulema property, which is located 30 km from Lundin Mining’s (TSX: LUN) Candelaria mine – the world’s second largest IOCG deposit. 2017 drilling at Zulema confirmed that host rocks and alteration are in line with that of Candelaria. The company is preparing for its next drill campaign.
- Copaquire is 10 km from Teck’s operating Quebrada Blanca mine, which is nearing the end of its mine life. There is a possibility that Teck may consider mining ore from Copaquire, which will provide near-term cash flows to Chilean through its NSR on the project.
- Chilean’s primary focus in Nova Scotia is the Bass River project. Previous surveys identified eight VTEM (Versatile Time Domain Electromagnetic) targets, including three high priority targets, from over 2,000 line km of data. The company is preparing for a 2,000 to 3,000 m drill campaign.
- We expect multiple catalysts in the near-term as the company advances its projects in both Chile and Nova Scotia.
- Management, board members and institutions hold 15% of the total outstanding shares.
- We are initiating coverage on Chilean with a BUY rating and a fair value estimate of $0.30 per share.
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